Palatine completes Hallmark Hotels deal
MANCHESTER-based Palatine Private Equity and Bridgepoint Development Capital have completed the £75m sale of Hallmark Hotels to investment firm Topland.
Palatine and BDC first invested in 2007, each investing £9.4m for a combined 78% stake in the business. They said they had doubled their initial investment.
Leeds-based Hallmark was established in 2007 as a vehicle to buy underperforming three-star hotels.
Now it has a portfolio of eight four-star hotels in Manchester, Hull, Bournemouth, Croydon, Derby, Gloucester and Carlisle. The company has over 700 rooms, employs 600 staff and recorded turnover of £20.2m in the year to December 2013.
Hallmark was led by chief executive Arnold Schnegg and finance director James Hawksworth. Both have left the business as part of the sale.
The acquisition will take Topland’s portfolio to 30 hotels across the UK, including the Menzies portfolio it purchased in November 2013. It now operates more than 3,000 hotel rooms across the UK and aims to build a £1bn hotel platform in the next few years.
Ed Fazakerley, partner at Palatine Private Equity, said: “Hallmark’s success was achieved through a robust acquisition strategy, driven by a talented and committed management team. The UK hotel market has faced challenging times, but through focus on providing a high quality product combined with significant operational improvements and a coherent sales strategy, we have built an impressive chain of four star hotels. It has been a pleasure working with the management team over the years and we’re pleased to have secured a good return for our investors.”
James Hawksworth, finance director at Hallmark Hotels, added: “Palatine and BDC have been extremely supportive through a period of tough trading conditions for the hotel and leisure market. We’ve worked closely with both to undertake rigorous renovation and operational improvements to our locationsacross the UK. They’ve been instrumental in boosting the financial performance of the business, while helping to achieve the four-star standard of the Hallmark Group.”
Palatine, Bridgepoint Development Capital and Hallmark received corporate finance advice from KPMG and legal advice from Shoosmiths.
